Todd Market Forecast

山上白云泉

Todd Market Forecast
		by Steve Todd
http://www.toddmarketforecast.com Todd Market Forecast Stock Market Update for Wednesday (09/10/08) www.toddmarketforecast.com Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific. DOW + 38 on 150 net advances NASDAQ COMP. + 19 on 300 net advances SHORT TERM TREND Bullish. INTERMEDIATE TERM TREND Bullish It is my belief that the stock market is in a bottoming process for the following reasons. Several important indices are in the vicinity of the July lows. This level turned back the last big slide and it should provide support. Also, you can cut the pessimism with a knife. The talking heads are universally bearish and for second straight day, the CBOE put call ratio was over 1.0. We are just coming off an oversold condition as the chart below shows and finally, the last time the market was down here, the number of new lows was over 1300. Now it is less than 400. This is a positive non confirmation and we will show that chart tomorrow. Fundamentally speaking, oil is down almost 30% from its highs. That, with its lowered inflation implications, has to start influencing investment at some point. I believe that the non reaction by stocks so far is a latent fear that crude would head right back up. Gold got murdered and oil lost ground in spite of a production cut by OPEC and a reduction of inventories by 500,000 barrels per day. The bond market fell back a bit and the dollar had another good day. NEWS AND FUNDAMENTALS: Crude inventories dropped 5.828 million barrels. This was more than the expected 1.898 million. On Thursday we get initial claims and the trade deficit. BOTTOM LINE: Our intermediate term systems are on a buy signal. Mutual fund investors are 100% invested in an equity mutual fund or ETF. Short term traders bought the SSO at 56.65. Sell at the close on Thursday. OTHER MARKETS We are on a buy for bonds as of July 24. We are on a buy for the dollar and a sell for the Euro as of July 23. We are on a sell for gold as of September 9. We’re on a sell for crude oil as of September 3. We are long term bullish for all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan.